Market Update: Fri, Feb 22, 2019 | LPL Financial Research

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Daily Insights

President Trump to meet with Chinese Vice Premier. With the two sides reportedly making significant headway in addressing key structural hurdles including technology transfer and intellectual property, President Trump is reportedly meeting with China’s top trade negotiator this afternoon. The news is buoying global markets and underpinning hopes for a large-scale deal in the relatively near term; consequently, a setback would almost assuredly trigger more volatility with recent economic data highlighting the already-negative impact the tensions are having on world trade.

The win streak is over. The Nasdaq 8-day win streak ended yesterday, while 3-day win streaks ended for the S&P 500 Index and Dow. Technically, the S&P 500 continues to trade above its 200-day moving average, but many short-term indicators are quite overbought. Bigger picture, new highs on various advance/decline (A/D) lines shows that there is significant participation in this move off of the December 24th lows, so any pullbacks could be used as opportunities to add to equity positions.

When is overbought a good thing? Yes, stocks are overbought on many different measures, but there could be a silver lining here. Recently, more than 90% of the components in the S&P 500 were trading above their 50-day moving average. Going back to 1990, it turns out the S&P 500 has been higher three months later 12 out of 13 times after this occurs. We take a closer look at this interesting development today on the LPL Research blog.

LPL Research is interviewed with TheStreet. LPL Senior Market Strategist Ryan Detrick was interviewed by TheStreet yesterday, talking about when the next recession could be and where to invest for 2019. You can watch the full interview here.

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Click Here for our detailed Weekly Economic Calendar

Friday

  • Germany GDP Report (Q4 2018)
  • Eurozone CPI Report (Jan)

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